Scottish Court of Session Decisions

This is a reclaiming motion against an interlocutor pronounced by the Lord Ordinary dated 24 November 1998, in which he granted interim interdict in an action before him at the instance of the pursuers and respondents in the following terms:

The background to this case as set out in the summons, and as elaborated upon by counsel for the defender and reclaimer in the absence of defences, is that the

pursuers carry on business as insurance brokers. Until 31 July 1998 the defender was employed by them as Assistant Director at their Glasgow office. One of the conditions of the defender's employment was Clause 11.1 of what was described as the House Rules, which was in the following terms:

In the summons the pursuers aver that in or around July 1998 the defender accepted a redundancy option which had been offered to him and in terms of that offer and acceptance, his employment was terminated by consent of both parties with effect from 31 July 1998. It should be said in passing that counsel for the defender and reclaimer stated that these averments were not accepted, and that, in due course, it would be maintained that the termination of the defender's employment was unlawful and that, in terms of Clause 11.4 of the House Rules, the restrictive covenant set out above was unenforceable. However, as counsel explained, that issue is directed to the merits of the action, and since he accepted that the relative strengths of the parties' cases on the merits were neutral, it does not affect the present appeal.

In the summons, the pursuers go on to aver that in or around November 1998 the pursuers became aware that the defender had formed a business association (the precise nature of which was to the pursuers unknown) for the purpose of insurance brokerage with George Weightman, and that the defender was approaching and soliciting the custom of clients of the pursuers with whom he had had personal dealings in the last 12 months of his employment with them, and that certain of them had become clients of the defender and Weightman. Accordingly they aver that the defender's activities are in breach of the restrictive covenant referred to.

For his part counsel for the defender and reclaimer explained that the defender has a franchise arrangement with George Weightman, and that he is doing the same kind of work as he was doing when he was in the pursuers' employment, namely, looking after the interests of a portfolio of clients which he had had before the pursuers took over the business of the defender's previous employers. He maintained that he had no function to go out and find new clients, but was restricted to furthering the interests of those in his portfolio. This aspect of the defender's submission is disputed by the pursuers but since it raises a question of fact, to be resolved in evidence, it has little relevance to the present appeal.

Before the Lord Ordinary counsel for the defender argued, first of all, that having regard to the background of this case, the terms of the relevant restriction were unreasonably wide, and went far beyond what might reasonably be required to protect the legitimate interests of the pursuers. Secondly, counsel for the defender argued that the balance of convenience in this case was firmly against the grant of interim interdict.

The Lord Ordinary rejected both of these arguments, and duly pronounced the interlocutor of 24 November 1998. Against that interlocutor the defender has enrolled this reclaiming motion.

Notwithstanding his arguments in the Outer House and his grounds of appeal, counsel for the defender and reclaimer made it quite clear in this court that he was not seeking recall of the Lord Ordinary's interlocutor on the first ground, namely, that the terms of the restrictive covenant were unreasonably wide and went far beyond what might reasonably be required to protect the legitimate interests of the pursuers, although it did seem during the course of his argument that he was leaning in that direction. Be that as it may, the only argument which he presented to us was that the balance of convenience was firmly against the granting of interim interdict, and that the Lord Ordinary had erred in the exercise of his discretion by doing so.

There was no dispute that this was a matter for the discretion of the Lord Ordinary, and that it was for the defender and reclaimer to satisfy us that the Lord Ordinary had failed to exercise that discretion properly.

In that connection there is no suggestion that the Lord Ordinary, in reaching his decision, failed to take into account something which he ought to have taken into account, or that he took something into account which he ought not to have done. The argument which was presented to us was that the Lord Ordinary had failed to give proper weight to the factors which pointed to the balance of convenience being in favour of the refusal of interim interdict as opposed to the granting of it and that it should accordingly be recalled.

It is not necessary for us to relate these factors because they are set out in detail in the Lord Ordinary's opinion and they were simply reiterated before us with particular emphasis on the submission that the interim interdict would have a devastating effect on the defender's prospects of employment. It must be borne in mind, however, that at the same time the factors in favour of granting interim interdict on the balance of convenience are also set out in the Lord Ordinary's opinion and that he had to weigh up these competing factors in reaching his final decision.

In our opinion the Lord Ordinary carried out his task in an exemplary fashion, and we do not accept that he failed to give proper weight to the submissions of the defender. The Lord Ordinary fully recognised that the defender would be prejudiced to some degree if this interim interdict were to be granted, but he decided that the factors in favour of doing so outweighed the contrary factors. We agree with that conclusion, which in our view is unassailable. Accordingly this reclaiming motion must be refused.